Older Apple iOS products sold at a discounted price, like the iPhone 3GS and first-generation iPad, are often more popular than newer devices running the Google Android operating system, a new report claims.

Checks with U.S. retail sales channels conducted by Canaccord Genuity technology analyst Michael Walkley found that the iPhone 4 is "by far" the top selling device at both carriers AT&T and Verizon. But Apple's older devices have also found great success.

"Interestingly, our April checks indicated continued strong demand for the iPhone 3GS at AT&T and iPad 1 at Verizon, as these older generation products with reduced prices often outsold new Android products," Walkley wrote in a note to investors on Monday. "We believe this highlights Apple's significant competitive advantage, and these older products help Apple offer a tiered pricing strategy at key channels."

Checks with Verizon stores found that the 16GB and 32GB versions of the first-generation iPad sold out in less than two weeks after the iPad 2 debuted. And at AT&T stores, the $49 iPhone 3GS outsold newer phones like the HTC Inspire and Motorola Atrix.

Checks with stores found that new Android smartphones were largely gaining share from Windows 7 smartphones, but not the iPhone. Walkley also expects the iPhone to remain the top selling handset at Verizon throughout 2011 as upgrades continue, partially because the carrier is not allowing subsidies to customers that are still under a two-year contract.

Walkley also found that the iPad is by far the best selling tablet, while competing products like Research in Motion's PlayBook or the Motorola Xoom have had "modest sales."

"Longer term, we believe Apple's ramping iOS ecosystem will lead to a stronger replacement sales cycle, and this should help drive strong longer term earnings growth," he said.

Starting with the launch of the iPhone 3GS, Apple began selling the previous year's smartphone model in the U.S. for $99 with a two-year contract. This January, the price of an on-contract low-end iPhone dropped even further, to $49.

Collectively, smartphones running Google Android have surpassed the iPhone in terms of units being sold, due to the multitude of Android-powered devices from numerous manufacturers. No individual smartphone model has been able to compete with the iPhone in terms of total unit sales, however, helping to push Apple to record sales of 18.65 million iPhones last quarter.

Apple also heavily discounted the first-generation iPad after the iPad 2 was announced, with discounts starting at $100 and increasing even more over time. Similar deals were also offered by AT&T, which sold the 3G-capable version of the first-generation device, and Verizon, which sold the Wi-Fi-only model bundled with a MiFi 3G hotspot.

I was at Costco yesterday.
There was a big end-cap display of Motorola XOOMs.
As I walked up to the display I realized the entire thing was just flat sheets of cardboard that you would take to the checkout and then redeem to get your product. All the slots of "product" were full. None were removed to even make it appear as though there was some demand.

The only actual device was behind a locked display and it was in some sort of demo mode.
The demo mode simply said "BOOKS"
That's all. It never changed.

::eyeroll::
Why does this Android vs iOS thing have to be such a pissing contest?

Simply put for those who tout Android, it's more about hating Apple than than being an Android fan. First Windows now Android are the hater's Apple killers. It's really all about Apple. And after a couple of decades of suffering insults, the "sheeple" comments, the Apple death watch clocks, Apple fans are more than willing to rub the hater's noses in it.

Childish, stupid, meaningless, non productive...yes. Fun...absolutely! And don't kid yourself, the CEOs of these companies have tremedous egos and trash talk each other on a regular basis. See past comments from Michael Dell, Steve Ballmer, Steve Jobs about each other's accomplishments and products. Ballmer and Dell have pretty much shut up recently, though, in light of Apple's rise to power.

::eyeroll::
Why does this Android vs iOS thing have to be such a pissing contest?

You'd need to ask the analysts that question. They're the ones devaluating companies due to lesser market share and not financial health. Apparently, the analysts think that the more product you move the more successful a company or product is. Two decent products aren't allowed to have the same space, so one has to be declared a success and the other a failure. I've always run into the premise that if you're not a winner, you're a loser. No in-betweens.

I was at Costco yesterday.
There was a big end-cap display of Motorola XOOMs.
As I walked up to the display I realized the entire thing was just flat sheets of cardboard that you would take to the checkout and then redeem to get your product. All the slots of "product" were full. None were removed to even make it appear as though there was some demand.

That's pretty standard operating procedure for that type of device at Costco. iPods were always sold the exact same way. All (or almost all) the slots are always full in my experience. Nothing personal on the Xoom in the particular instance.

That being said, Costco displays of such items are not going to stimulate demand, unless they're being steeply discounted and people just buy one "because it's cheap." Apple has a huge advantage in the tablet game due to its retail stores.

::eyeroll::
Why does this Android vs iOS thing have to be such a pissing contest?

It is only a pissing contest because you chose to label it as such. It is and will continue to be a hotly contested competition between the OSes as the market develops for both the smartphone category and the revised tablet category. This is how business is done and its OK. In fact it is good, because it helps keep the market roiling and while it creates some uncertainty for consumers as they try to chose the product best suited for their needs, it means that the market has a wider variety of products to address those needs.

It's all good.

If you are going to insist on being an ass, at least demonstrate the intelligence to be a smart one

I was at Costco yesterday.
There was a big end-cap display of Motorola XOOMs.
As I walked up to the display I realized the entire thing was just flat sheets of cardboard that you would take to the checkout and then redeem to get your product. All the slots of "product" were full. None were removed to even make it appear as though there was some demand.

The only actual device was behind a locked display and it was in some sort of demo mode.
The demo mode simply said "BOOKS"
That's all. It never changed.

I walked away. Is that the strategy to sell these things?

Well, it was after all COSTCO. Hardly the type of store I would go to while trying to educate myself on a product - their sales folks are really cashiers/stockers.

I think it also tells the story of how they (the manufacturers) have chosen to sell these - through a warehouse store? It looks like commodities rather than higher end electronics.

I wouldn't go shopping there for a new TV or home stereo system until I new what I wanted.

I was at Costco yesterday.
There was a big end-cap display of Motorola XOOMs.
As I walked up to the display I realized the entire thing was just flat sheets of cardboard that you would take to the checkout and then redeem to get your product. All the slots of "product" were full. None were removed to even make it appear as though there was some demand.

The only actual device was behind a locked display and it was in some sort of demo mode.
The demo mode simply said "BOOKS"
That's all. It never changed.

I walked away. Is that the strategy to sell these things?

As neilw said, Costco will just take the cardboard illustration they pick up at the service desk register and trot it back to the open slots in the display. But your description of the demo setup is really pathetic marketing. Compare that with all the gear set out on the tables in an Apple Store for consumers to try.

I admit to being a Fanatical Moderate. I Disdain the Inane. Vyizderzominymororzizazizdenderizorziz?

Older Apple iOS products sold at a discounted price, like the iPhone 3GS and first-generation iPad, are often more popular than newer devices running the Google Android operating system, a new report claims. ...

I don't know that this is anything to celebrate. All this really means is that there are incredibly high levels of very stupid people out there.

The reason the carriers do the contract deals they do with the discounts on hardware is it's a kind of scam that they know a significant portion of the population falls for. The cost of the device appears lower and the end user thinks they are getting a deal when in fact the price of the contract itself is always far higher and the only cost to really watch out for. Saving a hundred or even a hundred and fifty dollars on the handset is nothing given that the true cost is absorbed into the contract.

Only a complete idiot would go for a $50 3Gs instead of a $200 iPhone 4 when the $150 they save is only a tiny fraction of the contract and you are stuck with the 3Gs for two or three years. Most who do so regret it later. The carriers know also, that a very large portion of those that bite on this particular hook will be so frustrated they will be upgrading that phone before the 2 or 3 years is up anyway.

I don't know that this is anything to celebrate. All this really means is that there are incredibly high levels of very stupid people out there.

The reason the carriers do the contract deals they do with the discounts on hardware is it's a kind of scam that a significant portion of the population falls for. The cost of the device appears lower and the end user thinks they are getting a deal when in fact the price of the contract itself is always far higher and the only cost to really watch out for. Saving a hundred or even a hundred and fifty dollars on the handset is nothing given that the true cost is absorbed into the contract.

Only a complete idiot would go for a $50 3Gs instead of a $200 iPhone 4 when the $150 they save is only a tiny fraction of the contract and you are stuck with the 3Gs for two or three years. Most who do so regret it later. The carriers know also, that a very large portion of those that bite on this particular hook will be so frustrated they will be upgrading that phone before the 2 or 3 years is up anyway.

So what if this fools people, if it does it does.

( In any case, at least here in the UK, the total cost of ownership of a iPhone 4 is much higher than a 3GS - when the both come with the same package, number of minutes, data etc - the iPhone 4 is both more expensive to "buy" and more expensive on the contract. )

my 3g works better than the prepaid android messes out there
my friend who bought one paid (don't know why) $200 android i believe 2.2 but not upgradable
he has tried some apps many don't work for his phone
and the prepaid plans with data nearly match a contract phone

i know prepaid may work perhaps in china and europe but its the data cost that doesn't make it such a deal

he doesn't want to be locked into a contract (but requires a credit card-go figure, and if something comes out BETTER he will buy that phone

the next big thing for apple is to address this prepaid customer base

if all future iphones 5, 4, and even 3gs could get a dual cdma, gsm

that would give apple i think huge control over the market and push apps

they could even put the inards of the 3gs in the iphone 4 case

apple must be working this angle soon

boost straight talk, etc have a good price point 45 and 50 unlimited but you buy the phone, apple could become a mvno and sell it that way, therefore more access to appstore

I spent the last 12 months hearing that the only reason Andoid is doing so well is all the cheap devices. Now we hear a lot of apple sales are old, cheap devices.

Looks like that argument cant be used to justify why android OS had 50% for smartphone sales in Q1 2011, way above the iPhone.

I don't know about the 50% of smartphone sales going Android and hadn't seen any reliable source that stated that. According to Comscore, Android's share of the smartphone market increased 6% this quarter, to 34.7%. Apple remained steady at 25.5%.

I spent the last 12 months hearing that the only reason Andoid is doing so well is all the cheap devices. Now we hear a lot of apple sales are old, cheap devices.

Looks like that argument cant be used to justify why android OS had 50% for smartphone sales in Q1 2011, way above the iPhone.

Was at the Pearl Harbor Navy Exchange yesterday. Almost all Android phones were "free". 1 Verizon iPad in stock. Lots of Zooms and a few Viewsonic tablets. Apple has fll up store within a store display which is sparte form the other PCs/Notebooks. No demo units of the Xoom or Viewsonic. iPads sell through pretty much he day they arrive.

Honolulu Ala Moana Apple store never has any iPad stock - sells the morning of arrival -though they do have service replacement units. I went to the Genius rep for an issue with my 64GB wifi model locking up. He checked it out. Then went into back and provided me with a replacement unit. In and out in 15 minutes. Store always crowded.

My biggest problem now with my iPad is geeting it away from my wife or son. At least I can get my MBP back from my wife now.

Only a complete idiot would go for a $50 3Gs instead of a $200 iPhone 4 when the $150 they save is only a tiny fraction of the contract and you are stuck with the 3Gs for two or three years. Most who do so regret it later. The carriers know also, that a very large portion of those that bite on this particular hook will be so frustrated they will be upgrading that phone before the 2 or 3 years is up anyway.

It is not a very good contract regardless of which phone you choose. If the terms of the contract were based on the need to subsidize the phone, the monthly cost should go down once the phone is 'paid off' but it doesn't. So if the customer is happy with the features of the $50 phone and doesn't even plan to upgrade until it breaks, then they are justifying the monthly fee as the cost of a owning any smart phone and they saved $150 dollars. Just because they have different priorities doesn't make them idiots. What about the guy who pays an early termination fee every year so he can upgrade to the newest iPhone? What is his IQ?

While your statistics might be slightly true with iPAD 1 since lot of people want it and there are so many of the andriod tablets, there is no way that apple sells 3 million old phones.

Just do a little research before making ridiculous claims.

I'm looking for the "facts" in your link. I can't find any.
Just a company announcement that 10 million Galaxy phones were pre-ordered worldwide.

Samsung had similar "facts" about sales of the Galaxy TAB but it turns out they shipped 2 million to retail outlets but sold "considerably less" according the WSJ. And "considerably less" was the quote from SAMSUNG.

A comparison between a 3Gs at $49 and two hand-picked devices being sold for $199 doesn't mean much. Used 2008 Honda Accords outsell 2011 Mazda 6's. No argument.

One would think that selling older iphones real cheap would help to regain the lead, but it isn't working. Why? because there still is very little choice in the iOS phone market. I believe if apple offered 'another model or two' to its line, they would enjoy more growth to the detriment of Android, versus what we are seeing today. As it turns out, many people do prefer 4-4.3" displays and many others like physical keyboards. Apple has the means to produce three different phone models, just as they have several MacBooks and iMacs. What the problems is with that, I'm not sure.

One would think that selling older iphones real cheap would help to regain the lead, but it isn't working. Why? because there still is very little choice in the iOS phone market. I believe if apple offered 'another model or two' to its line, they would enjoy more growth to the detriment of Android, versus what we are seeing today. As it turns out, many people do prefer 4-4.3" displays and many others like physical keyboards. Apple has the means to produce three different phone models, just as they have several MacBooks and iMacs. What the problems is with that, I'm not sure.

Couple reasons.

Volume purchasing means it's much cheaper for them to fab 10 million of Part X rather than 5mil X, 3m Y, 2m Z ... and then not sell some of each.

Fragmentation might be an issue if they differentiate too much and certain features aren't handled well by developers. Conversely, if they don't differentiate enough, people would go "what's the point?" and just buy the "iPhone Standard" as opposed to the hypothetical Jumbo, Mini, Keyboard versions.

That said, bring on the larger screen and iPad2 hardware in the iPhone 5

Yes, reality is really very bitter for Apple, raking in over half of the profits in the cell phone market with just 2 devices and outselling each and every *individual* Android handset by a huge margin

Quote:

apple is not gaining market shares.... but android is gaining market share in both low end and high end handset market.....

Wrong, Apple *is* gaining market share, just not as fast as Android. Both are eating away at RIM and Nokia. What does it matter anyway? Care to explain what's wrong with having 25% of the market? Why does Apple have to move more units than all Android manufacturers in the first place? Did it ever occur to you that a product or service can still be hugely successful, popular and high quality, even if it doesn't dominate in marketshare. In fact, let's turn that around: did it ever occur to you that in almost any market imaginable, mediocrity rules in volume and marketshare? For lots of people you can't beat 'cheap', so it's either 'shift large volume at low price' or 'sell less at higher profits'. Now go find a chart that shows how many high-end Android phones are sold for each iPhone, and repeat your observatiob that reality is bitter for Apple.

Quote:

find out what's the problem of iphones... why androids are out-selling iphone?

Just use your brain for more than a few seconds and realize that you are comparing a whole platform to just a single phone. There you have your answer...

A friend of mine purchased the new Acer tablet. It has nice weight & size, and seemed pretty quick.
My friend is an iPhone user, but was curious about Android, wanted Flash, and the price was pretty low. It is only 16GB, but has SD expansion.
He is troubled , however, by the lack of accessories, and especially by the lack of Apps.
Since iOS was started as a tablet operating system, and converted for use as a phone OS, it was useable from day one, even with few HD apps out at the time, due to compatibility to iPhone apps. iPhone momentum meant that iPad apps (or universal apps), were available almost immediately. With Android, tablet use was clearly an afterthought.
I told him he is effectively an early adopter, and must live with the growing pains. The apps will come.
I would have to get used to the UI, but I thought it seemed like a nice product.

If it were me, however, I would have spent the money on an iPad2.
For a good product at a great price, the iPad1 has got to be the best deal out there.

His experience really shows the power of Apple's compatible product line, with many universal apps that will run on iPod, iPhone, and iPad. Nothing else out there compares.

Simply put for those who tout Android, it's more about hating Apple than than being an Android fan. First Windows now Android are the hater's Apple killers. It's really all about Apple. And after a couple of decades of suffering insults, the "sheeple" comments, the Apple death watch clocks, Apple fans are more than willing to rub the hater's noses in it.

Childish, stupid, meaningless, non productive...yes. Fun...absolutely! And don't kid yourself, the CEOs of these companies have tremedous egos and trash talk each other on a regular basis. See past comments from Michael Dell, Steve Ballmer, Steve Jobs about each other's accomplishments and products. Ballmer and Dell have pretty much shut up recently, though, in light of Apple's rise to power.

Well said.

This new report pretty much shows Android buyers fall into two camps, 'I buy the cheapest and don't care what it is' group and the pure 'I won't buy anything from Apple' group. This bodes well for the strategy of Apple keeping products such as iPad 1s and iPhone 3GSs on the market at reduced prices. Yet another way to get people to discover how great the products are and also help those that simply can't afford the latest Apple gear. Slightly older Apple stuff is still way better than PCs, Android crap etc.

From Apple ][ - to new Mac Pro I've owned them all.Long on AAPL so biased"Google doesn't sell you anything, Google just sells you!"

I spent the last 12 months hearing that the only reason Andoid is doing so well is all the cheap devices. Now we hear a lot of apple sales are old, cheap devices. ...

That information was mistaken. The only reason Android is doing well is because the carriers see it in their interest to push it by whatever means they can. Less cost to them, maintaining more control over the user experience, and not allowing any handset maker to totally dominate are all goals they hope to achieve by this, and "open" android is a carriers dream for maintaining control.

Just use your brain for more than a few seconds and realize that you are comparing a whole platform to just a single phone. There you have your answer...

But that doesn't mean anything around here since it is a fight between Apple and Google that is the hot button issue, not one between Apple and some other single Android manufacturer.

Apple fanatics are so tired of being #2 and now they see what they thought might be their only chance to be #1 at something slipping away. They are in denial and are trying to spin it so Apple is still on top by comparing iPhone to just any single handset when actually their true desire is to beat Android since Android is spawn of the evil Google.

They should just relax and enjoy Apple quality as we have always done over the years regardless of market share. Apple is #1 in quality and apparently in profit. Nothing to worry about.

I spent the last 12 months hearing that the only reason Andoid is doing so well is all the cheap devices. Now we hear a lot of apple sales are old, cheap devices.

Looks like that argument cant be used to justify why android OS had 50% for smartphone sales in Q1 2011, way above the iPhone.

That's a funny reaction to a report on Apple selling more with last years model than any particular Android device. The report didn't say that Apple is selling the cheapest phone. It isn't. The 3GS retails at £450 off contract. There are android phones at £100. What the stats show is that Apple is winning the Market at the high price points it is competing in. If it competes with phones at £300 off contract, and £200 off contract it will probably win those segments too.

What's holding it back? Possibly fears of supply shortages. However it will cover all price points, except the lowest, as it does in the MP3 player Market.

I feel that cloud computing could play a part here. If most of your stuff is in the cloud you can live with smaller disk size, and low ram.

This new report pretty much shows Android buyers fall into two camps, 'I buy the cheapest and don't care what it is' group and the pure 'I won't buy anything from Apple' group. This bodes well for the strategy of Apple keeping products such as iPad 1s and iPhone 3GSs on the market at reduced prices. Yet another way to get people to discover how great the products are and also help those that simply can't afford the latest Apple gear. Slightly older Apple stuff is still way better than PCs, Android crap etc.

I think there is another group that dismisses Apple as a novelty OS that is fine for their girl friend/wife or kids but real men use Windows and Android because it is awesome to be the master of the computer world, we are macho kick ass computer experts.

But that doesn't mean anything around here since it is a fight between Apple and Google that is the hot button issue, not one between Apple and some other single Android manufacturer.

Apple fanatics are so tired of being #2 and now they see what they thought might be their only chance to be #1 at something slipping away. They are in denial and are trying to spin it so Apple is still on top by comparing iPhone to just any single handset when actually their true desire is to beat Android since Android is spawn of the evil Google.

They should just relax and enjoy Apple quality as we have always done over the years regardless of market share. Apple is #1 in quality and apparently in profit. Nothing to worry about.

I would prefer to win as a , primarily , iOS developer The bigger the Market the better. I understand that some Apple fans like the snobbery of the Ghetto. In any case this report proves that Apples phones, expensive though they are, outsell even the cheapest Android. That means that if Apple expands it's line it will clean up.